The U.S. Department of Housing and Urban Development (HUD) is illegally upending supports for tens of thousands of Americans experiencing homelessness or otherwise struggling to find stable housing, according to a lawsuit filed today by New Jersey Attorney General Matthew J. Platkin and a coalition of 20 other plaintiffs.
HUD is drastically changing its Continuum of Care grant program in violation of congressional policy by dramatically reducing the amount of grant funds that can be spent on permanent housing and project renewals and by putting new unlawful conditions on access to the funding. These illegal requirements would mandate residents accept certain services as a precondition to obtain housing, punish housing providers in localities that do not have strict anti-homeless laws, and deny funding to housing providers unless they adopt the Trump Administration’s views on gender—all barriers that are in contrast to HUD’s previous guidance and Congress’ approval.
Previous changes to the grant conditions have been incremental to avoid disrupting housing access and to allow housing providers to budget for their programs well in advance. By contrast, HUD’s new wholesale changes will create administrative chaos and likely result in thousands losing housing.
“The Trump Administration is actively engaging in an illegal effort to hamper the work of organizations that battle homelessness in New Jersey and across our country,” said Attorney General Platkin. “HUD’s changes to anti-homelessness grants are not only unlawful, they will cause more homelessness by blocking numerous New Jerseyans from getting access to housing, all in the name of political games. We are taking the Trump Administration to court and standing up for New Jerseyans for whom this could mean life or death.”
For decades, HUD has helped local and regional coalitions plan and coordinate housing and services for people experiencing homelessness through Continuum of Care grants, which were created by Congress. Providers pair these grants with other funding sources and rely on the predictability and continuity of the grants to support the unhoused.
HUD has a longstanding policy of encouraging what is known as a “Housing First” model that provides stable housing to individuals without preconditions like sobriety or a minimum personal income. These policies are proven to improve housing stability and public health while reducing the costs of homelessness to individuals and their communities.
Previously, HUD has directed approximately 90% of Continuum of Care funding to support permanent housing, but the agency’s new rule – which Congress never authorized – would cut that by two-thirds for grants starting in 2026. Similarly, HUD has long allowed grantees to protect around 90% of funding year to year – essentially guaranteeing renewal of projects to ensure that individuals and families living in those projects maintain stable housing. But HUD has slashed this figure, too, to only 30%. These new policies virtually guarantee that tens of thousands of formerly homeless people in permanent housing nationwide will eventually be evicted through no fault of their own when the funds are not renewed.
Additionally, HUD is planning to withhold funds to applicants that simply acknowledge the existence of transgender and other gender-diverse individuals, de-prioritize services to people with mental health issues or substance-use disorder and discriminate against localities whose approach to homelessness differs from the administration’s.
The complaint alleges HUD violated its own regulations by not engaging in rulemaking before issuing the changes and violated the law by not receiving congressional authorization for these new conditions, many of which are directly contrary to congressionally passed statutes and HUD’s own regulations. The plaintiffs also argue that HUD’s actions are arbitrary and capricious several times over, as HUD has made no effort whatsoever to explain the abandonment of their own longstanding policies or consider the obvious consequences of tens of thousands of vulnerable people being suddenly evicted. The agency explicitly encouraged grantees to implement Housing First policies and to focus on the particular needs of LGBTQ+ individuals as recently as last year.
The complaint, led by Washington Attorney General Nick Brown, New York Attorney General Letitia James, and Rhode Island Attorney General Peter Neronha, was filed this morning in the federal District of Rhode Island. Attorney General Platkin joined the coalition, which also includes the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, Oregon, Vermont, Wisconsin, and the Governors of Kentucky and Pennsylvania.
